Gold--The Yellow Devil

Gold--The Yellow Devil

Gold--The Yellow Devil

Gold--The Yellow Devil

Synopsis

The fascinating history of gold as a measure of value and a metal of money; analysis of its intrinsic economic meaning in class-divided societies; its historic role in the international monetary system.

Excerpt

This book was first published in Russian at the end of 1978. Subsequent events have confirmed its relevance today. Many a time the newspapers of the capitalist world have carried headlines screaming "Gold Panic!", "Gold Rush!" In graphs of gold prices the jagged line on the right suddenly soared up almost at right angles. It soon became impossible to chart them on the same scale, because at the beginning of 1980 the market price of gold in London or New York was almost 25 times higher than it had been only ten years earlier.

Then, in 1980-1982, the price of gold fell by 50 per cent and was on average about 400 dollars an ounce in the first half of 1982. The main reason was that it was a period of prolonged economic recession, when demand for most commodities dropped and in many capitalist countries there was a reduction in production and capital investment. These sharp fluctuations in the price of gold both reflect and enhance the instability of the capitalist economy.

Up to 1971 the official price of gold was 35 dollars per troy ounce (1.1 dollar per gramme), but it could be obtained legally from the US Treasury at this price only by a single privileged category of buyers--foreign monetary authorities and central banks. At that time this price differed only slightly from the free market price at which it was purchased by jewelers, manufacturers of electronic equipment, and rich investors who thought it prudent to invest part of their capital in gold. Buyers of jewelry and gold coins paid more per ounce of gold, of course: they were covering the cost of manufacturing the jewelry and coins, the profit of the manufacturers and retailers, and various taxes and surcharges. But the difference was still not very great, prices being in the order of a few dozen dollars per ounce.